Looking for ways to lower your insurance costs? From comparing providers to unlocking exclusive discounts, here’s how you can reduce your home and auto insurance premiums—and redirect that extra cash toward your financial goals.
Auto and homeowners insurance are two of the biggest expenses in many household budgets. The good news? You don’t have to overpay. With the right strategies, you can significantly cut your insurance premiums without sacrificing essential coverage.
Below is a practical guide to saving money on both auto insurance and homeowners insurance, helping you free up funds for priorities like paying off debt or growing your investments.
How to Reduce High Auto Insurance Premiums
According to the Bureau of Labor Statistics, auto insurance costs have surged by 55% over the past five years. While that increase can feel overwhelming, there are plenty of smart ways to lower your car insurance expenses.
Unlock Overlooked Discounts
Are you a low-mileage driver? Do you have a clean driving record or a completed defensive driving course? Many drivers miss out on discounts simply because they don’t ask. Contact your insurance provider to find out which discounts you may already qualify for.
Save on Student Drivers
Adding a teen driver to your policy can be costly—but good grades can help. Many insurers offer student discounts for drivers aged 16–25 who maintain a B average or higher. If your child is away at college and their car stays at home, you may also qualify for a reduced rate.
Compare Insurance Providers
A recent survey found that 75% of U.S. drivers don’t shop for new auto insurance every year—often resulting in unnecessary overpayments. Comparing quotes from multiple insurers can save you hundreds, or even thousands, annually.
Bundle Policies for Bigger Savings
Combining auto insurance with homeowners insurance or other policies can lead to substantial discounts. Paying your premium annually instead of monthly may also reduce costs. Think of it as buying in bulk—more coverage, less cost.
Consider Smaller Insurance Companies
Don’t limit your search to big-name insurers. According to Beth Swanson, an insurance analyst at The Zebra, smaller regional insurance providers often offer competitive rates and excellent service. Being lesser-known doesn’t mean they can’t deliver real savings.
Increase Your Deductible
If you’re financially prepared to handle higher out-of-pocket costs in the event of a claim, raising your deductible can significantly lower your premium. The Insurance Information Institute reports that increasing a deductible from $200 to $500 can reduce premiums by 15%–30%. Just be sure you have sufficient emergency savings in place.
A Smart Blueprint for Cheaper Homeowners Insurance
Homeowners insurance premiums have climbed sharply in recent years, rising from an average of $2,656 in 2021 to $3,303 in 2024. Costs vary widely based on location, home size, and coverage needs—but there are still effective ways to save.
Shop for Better Rates
Only about 7% of homeowners actively shop for a new insurance policy. If you haven’t compared options recently, now is the perfect time. Getting multiple quotes can reveal better coverage at lower prices.
Use Your Improved Credit Score
If your credit score has improved since you first purchased your policy, your insurance rate could improve too. “Credit scores play a major role in homeowners insurance pricing in many states,” says Ben Keys, Professor of Real Estate and Finance at the Wharton School. Notify your insurer if your score has gone up.
Invest in Home Resilience
Living in high-risk areas—such as regions prone to wildfires or extreme weather—can drive up insurance costs. However, insurers often reward homeowners who take steps to reduce risk. Fire-resistant materials, cleared brush, and community-wide mitigation efforts can all lead to lower premiums.
Bundle Multiple Policies
Just like with auto insurance, bundling your homeowners insurance with auto or other coverage types can unlock meaningful discounts and simplify your insurance management.
The Bottom Line
Insurance premiums may take a sizable bite out of your budget, but protecting your home and vehicle is essential. By shopping smart, asking for discounts, and making a few strategic adjustments, you can lower your insurance costs and put more money toward what truly matters in your financial life.
